Sunrise over Suzhou: New multi-purpose site drives local-for-local strategy in China
23 Aug 2019
Launched in late 2018, GEA’s new state-of-the-art flow components production facility in Suzhou, China, is already a well-oiled machine, thanks to superior planning and project management from GEA. The new site provides increased production capacity and flexibility while ensuring high product quality for GEA’s customers in Greater China and Asia Pacific.
In an in-depth interview, Soeren de Boon, Head of Supply Chain & Production for GEA in Suzhou, China, explains why GEA chose to build a new production site in Suzhou and how this contributes to GEA’s overall global manufacturing footprint strategy. He allows us to peek behind the curtain, giving us insights about the facility, how it supports local and regional customers while providing an attractive workplace in one of China’s most livable cities.
Q: What parts of the GEA business have been relocated to Suzhou from Shanghai and why?
A: In January 2017, we kicked off our global manufacturing footprint project, “Sunrise,” building a new facility in Suzhou, China, for the production of GEA Flow Components. Following its completion, we took over the building and moved this existing business, namely the machining and assembly of valves and pumps and related supply chain activities, from Shanghai to Suzhou in November 2018.
The primary driver for this project was the fact that, at the time, our flow component production was located in a rented facility in Shanghai; our original building had been demolished and the three-story alternative proved an unfavorable layout in terms of our production and logistics needs. By early 2018, we knew we would have to contend with capacity limitations. Moving this business to Suzhou also significantly contributes to one of GEA’s global manufacturing footprint goals, which is to have two multi-purpose sites in China – one in Tianjin and the other in Suzhou – where more than one product type is produced.
The new facility in Suzhou, with its 12,000 square meter production and 1,320 square meter office space, is built-to-spec, leveraging the newest building materials and utility technologies to ensure low energy consumption as well as total cost of ownership. The new plant is located next to our existing GEA Bock compressor production facility – which is critical to our refrigeration components business – and gives this site its multi-purpose designation. Situated in the Suzhou Industrial Park (SIP), one of the most financially successful industrial parks in the world – and certainly in China – this location provides very modern infrastructure and a business-friendly environment.
If you’ve spent any time in China, you realize how far ahead they are in terms of infrastructure, public transport, digitalization and e-mobility for example – it’s impressive.”– Soeren de Boon, Head of Supply Chain & Production, GEA, Suzhou, China
– Soeren de Boon, Head of Supply Chain & Production, GEA, Suzhou, China
Q: How does the move to Suzhou contribute to GEA’s overall manufacturing footprint in China? What kind of efficiencies have you been able to achieve?
A: The move meant we were able to optimize our equipment production footprint in Shanghai. Because the production facility in SIP is a multi-purpose site, we can take advantage of synergies and piggyback some functions. The same is true for our Tianjin site, which manufactures, among others, separators, decanters and roller mills for pasta production.
At our new Suzhou site we’re able to streamline many of our administrative functions, which covers everything from facility management, health, safety & environment, lean management, supply chain management and IT. And by having a cross-skilled workforce, we can balance work load fluctuations between our flow components and our compressor businesses. As we own this facility, we can lower our cost structure for the mid- to long-term.
Because the new facility in Suzhou was primarily a greenfield project, GEA took this opportunity to invest in building materials and utility equipment with low energy consumption ratios. Among other things, this included installing LED lighting technology with individual control functions for the production hall, a solar water heater system, as well as heat exchangers for the office HVAC system.
Q: Were you able to take the Shanghai workforce with you to Suzhou?
A: We retained roughly 50% of the total workforce – which includes both our office staff and our production workers. This result exceeded our expectations given it is not uncommon to lose a significant portion of your workforce when moving from what the Chinese refer to as a tier 1 to a tier 2 or tier 3 city. I think this speaks well of GEA and our company culture and especially of our long-term employees and strong middle management. For those who chose to stay, but not move households, the commute is about 30 minutes with a fast train and just over one hour by car, which gives our employees some flexibility.
Robotic production line for flange manufacturing at GEA Flow Components site, Suzhou, China.
Q: What are the key benefits for GEA employees at the new facility?
A: The new Suzhou facility provides a professional, state-of-the-art and high quality work environment with cutting-edge digital infrastructure. Open plan space as well as single-occupancy offices, several fully equipped meeting rooms and rooms for training are all available.
The air-conditioned production space was designed and built specifically for the manufacturing of pumps and valves. Materials and machines are all close at hand and the entire setup is largely organized according to lean principles, which means applying continuous learning and practices such as shop floor management, value stream mapping and design to improve processes and minimize waste to drive efficiency and speed of delivery.
With a rented facility, you’re often forced to make compromises and this is particularly felt in production. Our new flow components facility perfectly suits our needs because we could take our machinery, workforce, materials and information flow into consideration during the planning phase.”– Soeren de Boon, Head of Supply Chain & Production, GEA, Suzhou, China
– Soeren de Boon, Head of Supply Chain & Production, GEA, Suzhou, China
Q: You also managed the build and opening of GEA’s Flow Components production site in Bangalore, India, between 2012 and 2014. How do Suzhou and Bangalore work together, if at all?
A: Our Bangalore facility primarily serves the local Indian market, including a handful of neighboring countries. Suzhou partly serves as an intercompany supplier to Bangalore – both for flow components as well as Bock compressors; naturally, both sites are in regular contact given they are producing the same products. By sharing experiences and best-practices, employees from both sites are able to learn from one another.
Of course there’s still room for improvement when it comes to collaborating more closely, for example in terms of working groups, global sourcing and overall production optimization projects; these will be given greater focus going forward.
Producing in a market, for that market – or local for local – is the only way we can fully understand and be highly responsive to local customers and their requirements.”– Soeren de Boon, Head of Supply Chain & Production, GEA, Suzhou, China
– Soeren de Boon, Head of Supply Chain & Production, GEA, Suzhou, China
Q: They often say that “elephants can’t dance,” however you achieved some impressive benchmarks with this project. What were they?
A: Construction began in November 2017 and we finished on time one year later, relocating the production from Shanghai to Suzhou in November 2018. In less than 2 weeks production was up and fully running again. The actual serial production was offline for just 7 days. We brought the project in on budget, on time and achieved a very high quality, which adheres not only to our own very high standards, but also to the highest local and international safety as well as environmental rules and regulations.
Managing massive projects like this efficiently can be a challenge in large global companies, particular when you have team members involved like we did from diverse countries, organizational functions and different production sites. My hope is that Project Sunrise can serve as benchmark within GEA for future strategic manufacturing footprint projects. I have already heard that our approach and methodology are being copied and rolled out elsewhere within GEA.
The Project Sunrise team, including myself, actively support other GEA teams by sharing the knowledge we gained during this multi-year process – which we’re both happy and proud to do.
